ch 13: employee benefits and services Flashcards
describe employee benefits
- indirect financial payments that an employee receives during employment
- employee services are growing in importance as part of the total compensation
- benefits matter to employees
- benefits aligned with business strategy help attract and retain the right people to achieve business objectives
- benefits administration is an increasingly specialized task
- benefits must comply with a wide variety of laws in Canada
what are thr 5 govenrment-mandated benefits?
- employee insurance (EI)
- Canada/Quebec Pension Plans (C/QPP)
- workers’ compensation
- paid time off
- pay on termination of employment
what is employment insurance (EI)?
- federal program intended to provide temporary financial assistance to eligible persons who experience interruption to their work through no fault of their own.
- funded by contributions from employees and employers
- EI is perceived to be a benefit since it provides employees who are laid off, terminated without just cause, or who quit their job for a justifiable reason (such as harassment) with an alternative form of government income until they secure employment
how does someone qualify for EI?
- an employee must first have worked a minimum number of hours during a minimum number of weeks, called a qualifying period (the number of hours and weeks varies among regions of the country)
- there is a waiting period from the last day of work until benefits begin. The length of the waiting period varies, but it is usually two weeks.
- If the employee was provided with severance pay or holiday pay at the time of losing the job, these payments must run out before the waiting period begins
describe Canada/Quebec pension plans (C/QPP) and the different types
- provides working Canadians with a basic level of financial security on retirement
- types of benefits:
- retirement pensions
- disability benefits
- survivor benefits
- Benefits are payable only to those individuals who make contributions to the plans or to their family members.
describe the retirement pension
- 25 percent of the average earnings (adjusted for inflation up to the average inflation level during the last five years before retirement) over the years during which contributions were made
- can choose to begin receiving benefits at any time between the ages of 60 and 70
- Benefits are reduced on early retirement before a predetermined age (usually 65) and are increased in the case of late retirement.
describe disability benefits
- only paid for severe disabilities that are expected to be permanent or to last for an extended period
- 75 percent of the pension benefit earned at the date of disability, plus a flat-rate amount per child
describe survivor benefits
- paid on the death of a plan member
- A lump-sum payment is made to the plan member’s estate, and a monthly pension is also payable to the surviving spouse and each dependent child
describe workers’ compensation
- provides sure and prompt income and medical benefits to victims of work-related accidents or illnesses, regardless of fault
- benefits are non-taxable
- controlling costs:
- focus on accident prevention, safety, and health programs
- rehabilitation and modified return to work programs
- workers are required to co-operate with initiatives
- Every province and territory and the federal jurisdiction has its own workers’ compensation law
describe controlling workers’ compensation costs
- Although workers’ compensation boards pay the claims, the premiums for most employers depend on the number and dollar value of claims that are paid.
- two basic approaches to reducing workers’ compensation claims:
- firms try to reduce accident-or illness-causing conditions in facilities by instituting effective safety and health programs
- employers have become involved in instituting rehabilitation programs for injured or ill employees
what are the different types of paid time off?
- maternity/paternity leave
- vacations
- legislated holidays
- paid breaks
describe maternity/paternity paid time off
- up to 68 weeks
- guaranteed of old or similar job on return to work
- The amount of maternity leave is 17 or 18 weeks in each jurisdiction (15 weeks in Alberta), but parental and adoption leaves range from 34 to 52 weeks
- guaranteed their old jobs or similar jobs when they return to work
- can be taken by one parent or split between both parents
- Some employers provide full or partial pay for all or part of legally required unpaid leaves by “topping up” what employees receive from EI
describe vacations paid time off
- labour/employment standards legislation sets out the minimum amount of paid vacation that must be provided to employees
- More firms are taking a more flexible vacation leave approach
- Vacation policy decisions include:
- Are employees paid for accrued vacation time if they quit before taking their vacations?
- Are employees paid for a holiday if they don’t come to work the day before and the day after the holiday?
- should employers pay some premium—such as time and a half—when employees must work on holidays?
describe legislated holidays paid time off
- number of paid holidays varies from one jurisdiction to another from a minimum of five to a maximum of nine
- Additional holidays may be observed in each province
describe paid breaks for paid time off
- mandated paid and unpaid time off requirements within a work day at the provincial, territorial, or federal level.
- some jobs (shift work) required an uninterrupted break after a set number of hours
- if employee is under direct control of employer and expected to be available for work during this time, the break must be paid
- otherwise, it is unpaid (coffee and eating breaks)
describe pay on termination of employement paid time off
- employment/labour standards legislation requires that when employment is being terminated by the employer, the employee must be provided by termination pay
- requirements:
- reasonable advance notice periods
- advanced notice for mass layoffs
- severance pay
describe reasonable advance notice for pay on termination of employment
- provide employee in advance with a written notice
- advance (reasonable) notice applies only to employees whose employment is terminated through no clause of their own
- alternative is pay in lieu of reasonable notice and employee ceases to work immediately
what is advance/reasonable notice?
Advance written notice required if the employer is going to terminate employment of a worker without cause
what is pay in lieu of reasonable notice?
Advance written notice required if the employer is going to terminate employment of a worker without cause
describe advance notice for mass layoffs for pay on termination of employment
- some provinces require additional pay when the layoff of more than 50 employees occurs
- BC, Manitoba, Ontario, New Brunswick, Newfoundland, and Labrador
- The rationale behind this regulation is that larger layoffs result in longer time to re-employment, so in cases of larger layoffs, the employees are given longer reasonable notice period
describe severance pay for pay on termination of employment
- an additional payout on top of the minimum notice period requirements
- only applies in certain specific conditions in the applicable jurisdictions
- Employees only in Ontario and the federal jurisdiction may be eligible for severance pay in addition to pay in lieu of notice in certain termination situations
- The amount of the severance pay is one week’s pay for each year of employment (maximum 26 weeks)
what are the different voluntary employer-sponsered benefits?
- life insurance
- supplementary healthcare/medical insurance
- short-term disability plans and sick leave plans
- long-term disability plans
- mental health benefits
describe life insurance
- almost all employees provide group life insurance plans
- accidental death and dismemberment coverage:
- provides a fixed lump-sum
- critical illness insurance
- lump-sum payment for a life-threatening illness
what is group life insurance?
Life insurance is provided at lower rates for all employees, including new employees, regardless of health or physical condition
what is accidental death and dismemberment coverage?
Employer-paid benefit that provides a fixed lump-sum benefit in addition to life insurance benefits when death is accidental or a range of benefits in case of accidental loss of limbs or sight
what is critical illness insurance?
The benefit that provides a lump-sum benefit to an employee who is diagnosed with and survives a life-threatening illness.
describe mental health benefits
- leading cause of short and long-term disability claims
- Psychiatric disabilities are the fastest growing of all occupational dis-abilities, with depression being the most common
- Only one-third of employers have implemented return-to-work programs specific to mental health
